Tuesday, September 2, 2014

Goals vs. Objectives: Can you Guarantee Achievement of them?

Goals are owned by individuals as personal contributions to the 'collective achievement' of the Objectives. 

The term OBJECTIVE really starts out in the publication of "The Practice of Management" by Peter Drucker. He defines the term ‘objective as the larger 'end point'.  He further defines OBJECTIVES as being achieved through a sub-collection of 'supporting goals' - the children of the parent objective; and then the story further illustrates that 'objectives' are 'owned' by the 'institution 'the team' and the corporation, the organization. Goals are owned by individuals as personal contributions to the 'collective achievement' of the Objectives. 

The Objectives are those found in the Strategy Map. At least, this is what the Kaplan-Norton terminology recommends. Objective - to stay in the premier league (to avoid relegation ) 
Goal - to achieve a minimum of 40 points required to meet this objective. Whoever defines and sets the objective (the senior management team), must be accountable for defining an objective that is achievable. It is only achievable if the supporting goals assigned to the individual contributors downstream (employees), can actually be achieved. That is, the individuals have to have the capacity to actually achieve the mission and its measure (supporting goal) assigned to them. Using the goal set, you then work out your objective execution strategy (what your win, draw and loss ratios need to be to achieve it.). The Strategic Objectives, on the other side, are more flexible and may change when certain Factors of Influence in the business environment (macro- or micro-economic) determine an adaptation of the Strategy and, eventually, the kick-in of a Scenario Plan that has been prepared in advance.

A large dash of ‘freedom to manage’: Times have changed – It is the VUCA digital –knowledge era, higher volatility, uncertainties, complexity, and ambiguities render most of the tools ineffective – some have fallen by the wayside entirely. Moreover, knowledge people require a different way to work. The fix for both is the same: a different design of management with a new set of tools. What is needed today is strong front end decision making and a large dash of 'freedom to manage', instead of out-of-date disjointed top down management paradigms. Nobody can guarantee the achievement of the annual goals. But their achievement's probability can be increased, if the strategic management system is built and used according to the correct and complete framework. There is a thin line here between success and failure, as everybody has some sort of such system in place. But the majority of the companies don't accomplish the goals at the end of the year.

Two barrier to reach goals: On the assumption that we are all working with a set of SMART objectives - this is a fairly easy question to answer at any time of the year. In reality, however, many staff members are burdened with a set of "dynamic" objectives and find themselves chasing the goal posts.  Drucker was referring to two very big problems: 
(1) Poor communication styles prevent the objectives and supporting goals from being 'known'. This is a classic difficulty with a strictly command and control style of management. 
(2) Complexity. These are complex ideas (performance management) that have a lot of moving parts. And there's too much 'stuff' for employees to keep in their heads. When complex ideas can be 'visualized' in this way, individual contributors can for the first time see where they fit in the universe of work and it can bring a great sense of purpose to their work.

Terminology differences are a rough spot. Each 'school' of performance management (as in all schools) use particular terms in specific contexts to standardize their use and mean the same thing to all practitioners within that school. When talking 'across schools' practitioners can be speaking different languages, each seeing the world through their 'practice'. Add to this the 'public' (those outside the practice) contribution of misused terms like; 'goal', objective, measure, 'KPI' and you have a multilingual conversation with misunderstandings. 

Both Objectives and Goals have related measures. A metaphor is the sporting event. Winning the game is the 'objective' made possible through the contribution of individual players when they score a 'goal'. Goals win the game - the end objective. Both objectives and goals have their measures. However, Employees do not need to be overburdened with memorizing that the task they just completed rolls up to a supporting goal assigned to them,then the goal rolls up to an objective created by senior management, that objective is usually one of the four to five strategic objectives sit on the top level executive business plan somewhere in the universe. However, if they do want to know, they can go into the company communication platform and 'click' all the way 'up stream' and see the cascading waterfall of 'context' that their individual contribution to 'moved the needle'. 

There is no way to guarantee achievement of the objectives. Among the many reasons why companies fail to hit targets set is simply because during the year they fail to activate periodic target reviews. Back to the sport analog, in 90 minutes the best sports managers often change their tactics to ensure their team doesn't lose as soon as it becomes clear they can't win!! Hence, business managers must incorporate this approach too and avoid "ball watching" until the final whistle of the game.

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